Phenylpyruvic acid (PPA) is widely used in the pharmaceutical, food, and chemical industries. Here, a two-step bioconversion process, involving growing and resting cells, was established to produce PPA from l-phenylalanine using the engineered Escherichia coli constructed previously. First, the biotransformation conditions for growing cells were optimized (l-phenylalanine concentration 20.0 g·L−1, temperature 35°C) and a two-stage temperature control strategy (keep 20°C for 12 h and increase the temperature to 35°C until the end of biotransformation) was performed. The biotransformation conditions for resting cells were then optimized in 3-L bioreactor and the optimized conditions were as follows: agitation speed 500 rpm, aeration rate 1.5 vvm, and l-phenylalanine concentration 30 g·L−1. The total maximal production (mass conversion rate) reached 29.8 ± 2.1 g·L−1 (99.3%) and 75.1 ± 2.5 g·L−1 (93.9%) in the flask and 3-L bioreactor, respectively. Finally, a kinetic model was established, and it was revealed that the substrate and product inhibition were the main limiting factors for resting cell biotransformation.